E-fuels promise to replace fossil fuels with renewable electricity without the demand-side transformations required for a direct electrification. However, e-fuels’ versatility is counterbalanced by their fragile climate effectiveness, high costs and uncertain availability. E-fuel mitigation costs are €800–1,200 per tCO2. Large-scale deployment could reduce costs to €20–270 per tCO2 until 2050, yet it is unlikely that e-fuels will become cheap and abundant early enough. Neglecting demand-side transformations threatens to lock in a fossil-fuel dependency if e-fuels fall short of expectations. Sensible climate policy supports e-fuel deployment while hedging against the risk of their unavailability at large scale. Policies should be guided by a ‘merit order of end uses’ that prioritizes hydrogen and e-fuels for sectors that are inaccessible to direct electrification. E-fuels—hydrocarbon fuels synthesized from green hydrogen—can replace fossil fuels. This Perspective highlights the opportunities and risks of e-fuels, and concludes that hydrogen and e-fuels should be prioritized for sectors inaccessible to direct electrification.

Potential and risks of hydrogen-based e-fuels in climate change mitigation

Industrial decarbonization is a daunting challenge given the relative lack of low-carbon options available for “hard to decarbonize” industries such as iron and steel, cement, and chemicals. Hydrogen, however, offers one potential solution to this dilemma given that is an abundant and energy dense fuel capable of not just meeting industrial energy requirements, but also providing long-duration energy storage. Despite the abundance and potential of hydrogen, isolating it and utilizing it for industrial decarbonization remains logistically challenging and is, in many cases, expensive. Industrial utilization of hydrogen is currently dominated by oil refining and chemical production with nearly all of the hydrogen used in these applications coming from fossil fuels. The generation of low-carbon or zero-carbon hydrogen for industrial applications requires new modes of hydrogen production that either intrinsically produce no carbon emissions or are combined with carbon capture technologies. This review takes a sociotechnical perspective to examine the full range of industries and industrial processes for which hydrogen can support decarbonization and the technical, economic, social and political factors that will impact hydrogen adoption.

Industrial decarbonization via hydrogen: A critical and systematic review of developments, socio-technical systems and policy options

Cost degression in photovoltaics, wind-power and battery storage has been faster than previously anticipated. In the future, climate policy to limit global warming to 1.5–2 °C will make carbon-based fuels increasingly scarce and expensive. Here we show that further progress in solar- and wind-power technology along with carbon pricing to reach the Paris Climate targets could make electricity cheaper than carbon-based fuels. In combination with demand-side innovation, for instance in e-mobility and heat pumps, this is likely to induce a fundamental transformation of energy systems towards a dominance of electricity-based end uses. In a 1.5 °C scenario with limited availability of bioenergy and carbon dioxide removal, electricity could account for 66% of final energy by mid-century, three times the current levels and substantially higher than in previous climate policy scenarios assessed by the Intergovernmental Panel on Climate Change. The lower production of bioenergy in our high-electrification scenarios markedly reduces energy-related land and water requirements. The impact of rapidly falling costs of renewable energy and battery technology on long-term climate stabilization pathways is not well understood. Luderer et al. show that reduced renewable costs and climate policies will make electricity the cheapest energy carrier and can lead to electricity accounting for nearly two-thirds of global energy use by mid-century.

Impact of declining renewable energy costs on electrification in low-emission scenarios

Ambitious climate policies, as well as economic development, education, technological progress and less resource-intensive lifestyles, are crucial elements for progress towards the UN Sustainable Development Goals (SDGs). However, using an integrated modelling framework covering 56 indicators or proxies across all 17 SDGs, we show that they are insufficient to reach the targets. An additional sustainable development package, including international climate finance, progressive redistribution of carbon pricing revenues, sufficient and healthy nutrition and improved access to modern energy, enables a more comprehensive sustainable development pathway. We quantify climate and SDG outcomes, showing that these interventions substantially boost progress towards many aspects of the UN Agenda 2030 and simultaneously facilitate reaching ambitious climate targets. Nonetheless, several important gaps remain; for example, with respect to the eradication of extreme poverty (180 million people remaining in 2030). These gaps can be closed by 2050 for many SDGs while also respecting the 1.5 °C target and several other planetary boundaries. Current action is insufficient to meet both the Paris Agreement and the Sustainable Development Goals. Integrated model-based analysis shows that strong interventions across many dimensions, together with ambitious lifestyle change, are needed to enable real progress towards the UN Agenda 2030.

/pdf/a-sustainable-development-pathway-for-climate-action-within-4knj5c9ygl.pdf

A sustainable development pathway for climate action within the UN 2030 Agenda

/pdf/climate-change-2022-mitigation-of-climate-change-2y1c4mqi.pdf

Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change, Chapter 11

The decarbonisation of industry is a bottleneck for EU's 2050 target of climate neutrality. Replacing fossil fuels with low-carbon electricity is at the core of this challenge; however, the aggregate electrification potential and resulting system-wide CO2 reductions for diverse industrial processes are unknown. Here, we present the results from a comprehensive bottom-up analysis of the energy use in eleven industrial sectors (accounting for 92% of Europe's industry CO2 emissions), and estimate the technological potential for industry electrification in three stages. 78% of the energy demand is electrifiable with technologies that are already established, while 99% electrification can be achieved with the addition of technologies currently under development. Such a deep electrification reduces CO2 emissions already based on the carbon intensity of today's electricity (~300 gCO2/kWhel). With an increasing decarbonisation of the power sector (IEA: 12 gCO2/kWhel in 2050), electrification could cut CO2 emissions by 78%, and almost entirely abate the energy-related CO2 emissions, reducing the industry bottleneck to only residual process emissions. Despite its decarbonisation potential, the extent to which direct electrification will be deployed in industry remains uncertain and depends on the relative cost of electric technologies compared to other low-carbon options.

/pdf/the-co2-reduction-potential-for-the-european-industry-via-4uk3kcbdl3.pdf

The CO2 reduction potential for the European industry via direct electrification of heat supply (power-to-heat)

/pdf/innovation-and-export-opportunities-of-the-energy-transition-1vugdwtggt.pdf

Innovation and export opportunities of the energy transition

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The CO2 reduction potential for the European industry via direct electrification of heat supply (power-to-heat)

Innovation and export opportunities of the energy transition